Bucher Hydraulics Private Limited vs Additional/Joint/Deputy/Assistant Commissioner Of Income Tax/ Income-tax Officer, National Faceless Assessment Centre, Delhi

“1.

General Ground - That the Ld. Assessing Officer ('AO') of National Faceless Assessment Centre ('NaFAC')/Ld. Transfer Pricing Officer ('TPO') and consequently the Dispute Resolution Panel ('DRP') have grossly erred in law and on facts and circumstances of the appellant's case in proposing a Transfer Pricing adjustment to the income of the appellant amounting to INR 98,57,303/- in relation to the International Transaction of intra-group services ('IGS') availed from its associated enterprises (AEs) in the nature of management, marketing and information technology services. The adjustment proposed is wholly illegal, erroneous and untenable in law and on the facts of the case of the appellant and is prayed to be deleted.

2.

That the order of Assessment including order of the Ld. TPO and the DRP Directions are bad in law and erroneous on the facts of the appellant.

3.

That of u/s the order Assessment 143(3)/144C(13)/144B is bad in law as it is time barred as per the provisions of Section 144C(13) of the Act.

4.

That without prejudice to Ground No. 3, the Ld. TPO and consequently the DRP have grossly erred in law and on facts of the appellant's case in exceeding his jurisdiction in determining the ALP of IGS received at NIL as against INR 98,57,303/- under Other Method by asserting that no worthwhile service has been received by the appellant for which any amount would not have been paid by the service recipient to a third party and without providing any comparable uncontrolled transaction of identical services that has been or would have been transacted at NIL ALP.

5.

That without prejudice to Ground No. 3, the Ld. TPO and consequently the DRP have grossly erred in law and on facts of the appellant's case in not following the directions of the Hon'ble ITAT in AY 2011-12 in the appellant's own case on the identical issue, which is against the principles of judicial hierarchy.

6.

That without prejudice to Ground No. 3, the Ld. TPO and consequently the DRP have grossly erred in law and on facts of the appellant's case:-

6.1

in not considering the IGS agreements and invoices received from the AEs as evidences of actual receipt of IGS without providing cogent reasons;

6.2

in erroneously stating that the e-mail correspondences provided by the appellant as evidences of actual receipt, requisition and benefit of IGS are very general correspondences with no evidence of any specialized advice or service by the AEs; and

6.3

in erroneously stating that the appellant has not provided any evidence pertaining to the cost incurred by the AEs in rendering the IGS along with the details of allocation keys.

7.

That without prejudice to Grounds No. 3 to 6, the Ld. TPO and consequently the DRP have grossly erred in law and on facts of the appellant's case in rejecting the Transactional Net Margin Method ('TNMM') as the most appropriate method, disregarding the aggregation of the IGS transaction with other international transactions of the appellant for determining the ALP of all the international transactions affecting the Profit and Loss Account, without giving any cogent reasons.

8.

That without prejudice to Ground No. 3, the Ld. TPO and consequently the Ld. AO (NaFAC) have erred in law and in the circumstances of the appellant by initiation of penalty proceedings u/s 270A of the Act for underreporting of income.

9.

That each ground of appeal is independent and without prejudice to other grounds of appeal raised herein.”

“2.1

"That, on the facts and circumstances of the appellant's case and in law, the Hon'ble Dispute Resolution Panel ('DRP') has grossly erred in issuing the DRP Directions under section 144C(5) of the Income-tax Act, 1961 ('the Act') dated 22nd September 2021 without quoting the mandatory document identification number ('DIN') in conformity with Para-2 and Para-3 of Circular No.19/2019 dated 14 August 2019 and thus, the aforesaid DRP Directions and the final assessment order passed by the Learned Assessing Officer ('Ld. AO') of National Faceless Assessment Centre ('NaFAC') in pursuance of such DRP Directions deserve to be held as invalid, bad in law and void-ab-initio."

"3.1

On the facts and circumstances of the case and in law, the final assessment order dated 24.11.2021, passed by the Ld. AO under section 143(3) r.w.s. 144C (13) r.w.s. 144B of the Act is barred by limitation under Section 153(1) read with Section 153(4) of the Act (since 30.09.2021 was the last date for completion of assessment after considering extension of timelines under TOLA and by CBDT Notifications subsequent thereto), and is thus void, bad in law and liable to be quashed in view of the judgement of the Hon'ble Madras High Court in the case of Roca Bathroom Products Private Limited [TS-359-HC-2022(MAD)-TP) and other similar judgements."

“Issue of Limitation u/s 144C(13)-Comparison of Income Tax Timelines in Appellant's Case vis-à-vis Other Judicial Decisions

In this regard, it is noteworthy to bring to your Honours' attention to significant rulings of the Hon'ble Bombay High Court and coordinate benches of the Hon'ble Jurisdictional Delhi ITAT which have similar facts matrix as of the Appellant w.r.t the time-barring Final Assessment Order passed u/s 144C(13) of the Income-tax Act, 1961 ("the Act") in the light of time extensions granted by the Government, which have been listed below:

1.

Shell India Markets Pvt. Ltd. [TS-94-HC-2022(BOM)-TP] (Refer Page No. 16-31 of CLNC)

2.

Rio Tinto India Pvt Ltd Vs ACIT |2025-TH-158-ITAT-DEL-INTL) (Refer Page No. 32-37 of CLNC)

3.

Rolls Royce India Pvt Ltd [TS-386-ITAT-2025(DEL)-TP] (Refer Page No. 38-58 of CLNC)

4.

Achampet Solar Private Ltd [TS-310-ITAT-2026(DEL)-TP)

5.

Ghanpur Solar Private Limited (TS-311-ITAT-2026(DEL)-TP]

"3.

We have considered the rival contentions and perused the material on record. We have observed that the Tribunal while passing order dated 04.07.2025 in ITA No. 252/Del/2022 in assessee's case has considered the limitation for passing assessment order under the Income Tax Act, and came to conclusion that the assessment order dated 18.11.2021 was barred by limitation and, hence, the same was quashed. We are of the view that so far as framing of assessment is concerned, the Department has to frame assessment within time provided under the Income Tax Act, 1961. So far as Extension of limitation by way of exclusion of period from 15.03.2020 to 28.02.2022 owing to Covid-19 granted by Hon'ble Supreme Court is not applicable to the assessment proceedings. The Ld. Counsel for the assessee has rightly relied upon the decisions stated as above in this order, and the Tribunal has rightly quashed the assessment being framed by the 10 vide assessment order dated 18.11.2021 beyond prescribed time limit under the 1961 Act. Thus, this M.A. lacks merit and is accordingly, dismissed."

Applicability of Income Tax Timelines Extension vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ("TOLA")

In this regard, it is respectfully submitted before your Honours that the Parliament had enacted TOLA (Refer Page No. 6 to 9 of CLNC) with retrospective effect from 31 March 2020, with aim to provide the relaxation of time limit for compliances or completion of actions under the specified Acts including Income Tax, falling during the period 20th March 2020 to 31st December 2020, to 31 March 2021. The said TOLA further empowered the government to further extend this period by way of notification(s).

Accordingly, the timelines specified under the Income Tax Act, 1961 were extended vide TOLA and various CBDT Notifications as follows:

It is evident from the above table that the timeline for completion of actions relating to the passing of Final Assessment Order under section 144C(13) of the Act was extended only up to 30.06.2021 vide CBDT Notification No. 38/2021, and no further relaxation was granted under any subsequent notifications issued by the CBDT.

Further, the said relaxation is, in any case, not applicable to the Appellant, as the DRP Directions in the Appellant's case were uploaded on 29.09.2021, which is beyond the period covered by the relaxation granted by the CBDT Notification. Accordingly, the Ld. AO was required to pass the Final Assessment Order under section 144C(13) of the Act by 31.10.2021, Le., within one month from the end of the month in which such directions were received. However, the Ld. AO passed the Final Assessment Order under section 144C(13) of the Act only on 24.11.2021.

Accordingly, it is prayed to hold the impugned Final Assessment Order as void and without jurisdiction having been passed beyond the statutory time limit, being barred by limitation as per Section 144C(13) of the Act.”

“(13)

Upon receipt of the directions issued under sub-section (5), the Assessing officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153 or section 153B, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.”

“15.

From examination of record in light of aforesaid rival contentions, it is crystal clear that the appellant assessee has not pressed any of the grounds but claimed that case is squarely covered by order dated 19.03.2024 in the case of "Nikon India Private Limited vs ACIT".

16.

The comparative table of vital events and dates of Nikon and present case are:-

S. No. Events Nikon Present 1. Directors of DRP issued under 17.03.2022 08.04.2022 section 144(c)5 2. Assessment case transferred 22.04.2022 Present case from Faceless AO to JAO under transferred on section 144B(8) of the Act 25.4.2022 3. DRP order received by JAO 02.05.2022 18.05.2022 4. Final assessment order passed 30.06.2022 30.06.2022 5. Limitation from April 2022 will 31.05.2022 31.05.2022 end on

17.

In the context of faceless assessment process time and place of dispatch and receipt of electronic document (in this case DRP order) is required to be ascertained by reference to section 13 of Information Technology Act, 2000 which is the basis prescribed under section 144B of Income Tax Act also (refer section 144 B (6)(v)). Hon'ble Supreme Court in case of GS Chatha Rice Mills [(2021)2SCC 209-J para 85)= 2020-TIOL-157-SC-CUS-LB, interpreted this very provision. Applying principles laid down by Hon'ble Supreme Court, only relevant fact necessary for deciding Ground No. 4 in present appeal relating to time barred assessment, is time of uploading by DRP of DRP order onto ITBA portal. Intimation letter to DRP order unambiguously shows 27th April 2022 as date of uploading of DRP order. This fact cannot be disputed. Except this critical and relevant information everything else (like when order is visible to AO, date of uploading some document by DCIT/ACIT circle 2 (1) (1) Delhi) has been submitted by Respondents. It is fair to conclude that date of uploading DRP order on ITBA portal is 27.04.2022. As per section 144C(13) of the Act, assessment had to be completed on or before 31.05.2022. In present case the assessment is completed only on 30.6.2022 i.e., it is time barred null and void. Therefore, impugned assessment order dated 30.06.2022 is set aside being barred by limitation. Other grounds having become academic in nature are left open.

18.

In the result appeal of the assessee is allowed.”